Joint ventures and implied fiduciary duties

The Court of Appeal has confirmed for the first time that a joint venture arrangement can give rise to an implied fiduciary duty owed by the director of one joint venture partner to another partner.

In Ross River Ltd and anor v Waveley Commercial Ltd and ors [2013] EWCA Civ 910, the claimants entered into a joint venture agreement with the first defendant, Waveley Commercial Ltd (WCL), to develop property in Bedfordshire. Under the terms of the agreement, the claimants were to provide finance for the development. Mr Barnett and Mr Harney (the second and third defendants) owned WCL and were more personally involved in the development on a day-to-day basis than the claimants.

After a few years, the claimants became suspicious of WCL, particularly in respect of several large payments they were making to third parties. The development appeared to be progressing slowly and in February 2009 proceedings were issued against WCL, Barnett and Harney…

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